I have been reading the posts of others concerning the latest attempt from our leaders to tax financial markets transactions. Of course, everyone in this business is against it with the usual reasons that it will drive the business overseas and end up reducing revenues for the tax man.
On one forum, Ralph Vince said "The high frequency boys - the very ones who are the equivalent to 21st century market makers - provide more liquidity than the world has
ever seen. This benefits everyone."
This is something I said weeks ago although not quite so eloquently. Why do we need liquidity in the secondary market? So the primary market - where corporations raise capital - will be readily available at reasonable prices.
"But lets make Wall Street pay for fixing the economy they broke" say the leaders. Let's see, trading broke the economy? How about unregulated derivatives and foolish innovations such as CDOs, sub-prime and financial wizardry? And why did that arise? From the government's initial meddling to juice the housing market with low rates so all Americans can buy the American dream.
The cure is usually worse than the disease when the government steps in.
OK, rant over. Happy Thanksgiving to all!